The decision of the
Background
The majority of the reasons in PME are concerned with the application of the owner,
For its part, PME argued that the lien could not be reduced without the benefit of a full trial and sought the inclusion of the quantum meruit amounts under its lien on the basis of both:
- The decision of the
Alberta Court of Appeal inIFP Technologies (Canada) Inc v EnCanada Midstream and Marketing, and the need to consider the factual matrix, including the written text of the written contract, the relevant contractual background, and the commercial context, in order to determine the objective intent of the parties;2 and - The organizing principle of good faith set out in the
Supreme Court of Canada decision in Bhasin v Hrynew, and its ability to imply terms into the parties' contractual relationship.3
Ultimately,
Although he did not close the door entirely on the prospect of arguments akin to PME's in the future,5
Comparison with the
Interestingly, in reaching this conclusion
In JV Driver, which was decided in the context of a summary judgment application,
He then went on to set out the following three conclusions upon a thorough review of relevant case law:9
- Where the lienholder has done work on or in respect of an improvement, or furnished material to be used in or in respect of an improvement, then that person has a lien for so much as "remains due to him", either pursuant to an agreed price or on a quantum meruit basis (pursuant to section 4 of the BLA);
- If the amount the lienholder claims as remaining due is for damages in tort or for breach of contract but not relating to work actually done on or in respect of the improvement, then there may be a damages claim, but it is not properly part of a lien; and
- If it is not clear whether the claim is properly the subject of a lien, then on the standard used for summary judgment applications the amount to be posed as security should be the higher amount and the issue left to the trial court or, perhaps, to a later application before trial once further facts have been learned in the questioning process.
Conclusion and takeaway
Despite the apparently different results reached in PME and JV Driver, the two decisions can be reconciled on the following basis:
- The starting point in terms of what a lien claimant may seek under a lien remains the express wording of the BLA itself, and which requires the amount(s) claimed to be "for so much of the price of the work or material as remains due to the person ."12 Further instructive is the fact that the BLA directs such amounts to be calculated with reference to "the contract price or the actual value of the work done and materials furnished, if there is not a specific contract price."13
- Damages incurred owing to a breach of any obligation associated with the organizing principle of good faith would appear, by their nature, to be more akin to the non-lienable category of damages identified by
Master Robertson in JV Driver and therefore unlikely to form the proper subject of a lien. - PME's reliance on the factual matrix in support of its argument that the parties' amendment and novation of its written contract did not appear to be supported by much (if any) evidence to demonstrate (i) this having occurred, or (ii) how the amounts which it sought to lien on this basis satisfied the requirements of the BLA.
- PME's application included a request for partial summary judgment, which likely involved admitting the express contractual amounts owing.
As a result, a lien claimant ought to be cognizant of the following in registering and seeking to enforce a lien that includes costs associated with the performance of the work, but not contractually acknowledged as owing:
- The starting point and general touchstone in an analysis of what amounts can be properly liened will involve the wording of the BLA, the parties' written agreement (if any), and any other written contract documents.
- If a lien claimant intends to include damages sustained as part of its lien, it must be prepared to show how these amounts constitute damages in relation to work done and for which the claimant seeks compensation. To the extent that any of these amounts constitute damages for work that the claimant has not been able to do and for which it has not billed, they will not be lienable.
- The ability to identify express evidence or contractual documentation in support of the amounts claimed may serve as the difference between success and failure in respect of any argument in this respect.
Footnotes
1.
2. PME at para 7, citing
3. PME at para 7, citing Bhasin v Hrynew, 2014 SCC 71. I
4. PME at para 19.
5. PME at para 13.
6. PME at para 17.
7. PME at para 18.
8.
9. JV Driver, ibid at para 156.
10. JV Driver at paras 171-172.
11. JV Driver at paras 157-163.
12. BLA, s. 6(1).
13. BLA, s. 4.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
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